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08.05.2024 22:15:05 - dpa-AFX: GNW-Adhoc: CrossAmerica Partners LP Reports First Quarter 2024 Results
Allentown, PA, May 08, 2024 (GLOBE NEWSWIRE) --
million loss on lease terminations with Applegreen, Adjusted EBITDA of $23.6
million compared to $50.8 million of Gross Profit for the First Quarter 2023 * Leverage, as defined in the CAPL Credit Facility, was 4.49 times as of March
Allentown, PA May 8, 2024 - CrossAmerica Partners LP (NYSE: CAPL) ("CrossAmerica" or the "Partnership"), a leading wholesale fuels distributor, convenience store operator, and owner and lessor of real estate used in the retail distribution of motor fuels, today reported financial results for the first quarter ended March 31, 2024.
"The first quarter was a difficult operating environment, with generally increasing fuel prices that resulted in lower margins along with industry wide lower overall demand for both fuel and merchandise. Our financial results for the quarter compared to the prior year reflect these challenges," said Charles Nifong, President and CEO of CrossAmerica. "After the quarter end, we finished our conversion of the Applegreen lessee dealer locations to company operated retail locations, which we expect to be immediately accretive to our financial results. Despite a challenging quarter, our business fundamentals are strong and
we are well positioned with both our operations and capital structure for continued success."
Non-GAAP Measures and Same Store Metrics
Non-GAAP measures used in this release include EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. These Non-GAAP measures
are further described and reconciled to their most directly comparable GAAP measures in the Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release.
Same store fuel volume and same store merchandise sales include aggregated individual store results for all stores that had fuel volume or merchandise sales in all months for both periods within the same segment. Same store merchandise sales excludes branded food sales and other revenues such as lottery
commissions and car wash sales. Certain merchandise products have been transitioned from a gross profit model (whereby CrossAmerica owns the inventory and records sales and cost of sales) to a scan-based trading model (whereby a third party owns the inventory and CrossAmerica records a commission in other revenues). Same store merchandise sales for the three months ended March 31, 2024 was adjusted to gross it up for the sales that would have been recorded
had CrossAmerica not changed models.
First Quarter Results
Consolidated Results
+-------------------------------------------------+----------+---------+
| Key Operating Metrics | Q1 2024 | Q1 2023 |
+-------------------------------------------------+----------+---------+
| Net Income | ($17.5M) | ($1.0M) |
+-------------------------------------------------+----------+---------+
| Operating Expenses | $52.0M | $45.6M |
+-------------------------------------------------+----------+---------+
| Adjusted EBITDA | $23.6M | $31.7M |
+-------------------------------------------------+----------+---------+
| Distributable Cash Flow | $11.7M | $19.1M |
+-------------------------------------------------+----------+---------+
| Distribution Coverage Ratio: Current Quarter | 0.59x | 0.96x |
+-------------------------------------------------+----------+---------+
| Distribution Coverage Ratio: Trailing 12 Months | 1.37x | 1.70x |
+-------------------------------------------------+----------+---------+
CrossAmerica reported declines in Net Income, Adjusted EBITDA and Distributable
Cash Flow for the first quarter 2024 compared to the first quarter 2023. This
was primarily driven by an overall decline in motor fuel gross profit associated
with the movements of crude oil prices within the two periods and an increase in
operating expenses primarily related to the conversion of certain lessee dealer
and commission agent sites to company operated sites. This was partially offset
by an increase in merchandise gross profit of 18% for the first quarter 2024
when compared to the same period in 2023. The year-over-year decline in
Distributable Cash Flow and Distribution Coverage was primarily driven by the
decline in Adjusted EBITDA noted above.
Wholesale Segment
+-------------------------------------------+-----------+-----------+
| Key Operating Metrics | Q1 2024 | Q1 2023 |
+-------------------------------------------+-----------+-----------+
| Wholesale segment gross profit | $27.0M | $31.2M |
+-------------------------------------------+-----------+-----------+
| Wholesale motor fuel gallons distributed | 184.0M | 201.9M |
+-------------------------------------------+-----------+-----------+
| Average wholesale gross profit per gallon | $ 0.079 | $ 0.083 |
+-------------------------------------------+-----------+-----------+
During the first quarter 2024, CrossAmerica's wholesale segment gross profit
decreased 14% compared to the first quarter 2023. This was driven by a decline
in motor fuel and rent gross profit primarily due to the conversion of certain
lessee dealer sites to company operated and commission agent sites and a net
loss of independent dealer contracts. The motor fuel gross profit decline was
driven by a 5% decrease in fuel margin per gallon and a 9% decline in wholesale
volume distributed, with a substantial portion of the wholesale volume decline
attributable to the conversion of wholesale locations to retail locations and
the associated volume for these locations is now reflected in CrossAmerica's
retail segment.
Retail Segment
+----------------------------------------------------------+---------+---------+
|Key Operating Metrics |Q1 2024 |Q1 2023 | +----------------------------------------------------------+---------+---------+
|Retail segment gross profit |$54.4M |$50.8M | +----------------------------------------------------------+---------+---------+
| | | | +----------------------------------------------------------+---------+---------+
|Retail segment motor fuel gallons distributed |121.7M |119.1M | +----------------------------------------------------------+---------+---------+
|Same store motor fuel gallons distributed |108.6M |112.3M | +----------------------------------------------------------+---------+---------+
|Retail segment motor fuel gross profit |$26.0M |$26.8M | +----------------------------------------------------------+---------+---------+
|Retail segment margin per gallon, before deducting credit | | | |card fees and commissions |$ 0.308 |$ 0.318 | +----------------------------------------------------------+---------+---------+
| | | | +----------------------------------------------------------+---------+---------+
|Same store merchandise sales excluding cigarettes* |$42.3M |$41.3M | +----------------------------------------------------------+---------+---------+
|Merchandise gross profit* |$21.4M |$18.1M | +----------------------------------------------------------+---------+---------+
|Merchandise gross profit percentage* | 28.1 %| 27.8 %| +----------------------------------------------------------+---------+---------+
| | | | +----------------------------------------------------------+---------+---------+
|Operating Expenses |$43.1M |$36.1M | +----------------------------------------------------------+---------+---------+
|Retail Sites (end of period) | 546 | 462 | +----------------------------------------------------------+---------+---------+
*Includes only company operated retail sites
For the first quarter 2024, the retail segment generated a 7% increase in gross profit compared to the first quarter 2023. The increase for the first quarter 2024 was primarily due to higher merchandise gross profit, partially offset by a
decline of 3% in motor fuel gross profit.
The retail segment sold 121.7 million of retail fuel gallons during the first quarter 2024, which was an increase of 2% when compared to the first quarter 2023. This volume increase was primarily driven by the conversion of lessee dealer sites to company operated and commission agent sites over the past year and during the quarter, offset by a decline in volume for the base business. Same store retail segment fuel volume for the first quarter 2024 declined 3%
from 112.3 million gallons during the first quarter 2023 to 108.6 million gallons for the same period in 2024.
For the first quarter 2024, CrossAmerica's merchandise gross profit and other revenue increased 21% when compared to the first quarter 2023. The first quarter
increase was primarily driven by an increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites. Same store merchandise sales excluding cigarettes increased 2% for the first quarter 2024 when compared to the first quarter 2023. Merchandise gross profit percentage increased from 27.8% for the first quarter 2023 to 28.1% for the first quarter 2024, primarily due to improved merchandise margins in the categories of packaged beverages and snacks.
For the first quarter 2024, operating expenses for the retail segment increased $7 million dollars or 20% primarily driven by a 22% increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Acquisition of Assets from Applegreen
On January 26, 2024, CrossAmerica entered into an agreement to acquire certain
assets from Applegreen Midwest, LLC and Applegreen Florida, LLC. The assets were
acquired via the termination of the Partnership's existing lease agreements with
the Applegreen entities at 59 locations, for total consideration of $16.9
million. The transaction closed on a rolling basis by site beginning during the
first quarter of 2024 and ending in April 2024. The Partnership also acquired
for cash the inventory at the locations. The terms of the Partnership's leases
with Applegreen Midwest, LLC and Applegreen Florida, LLC could have been
extended to 2049 and 2048, respectively, including all renewal options. Of the
59 locations, 31 locations were converted during the first quarter of 2024 and
the remaining locations converted in April 2024. This transaction resulted in
the conversion of these lessee dealer sites to company operated sites.
Liquidity and Capital Resources
As of March 31, 2024, CrossAmerica had $798.3 million outstanding under its CAPL
Credit Facility. As of May 3, 2024, after taking into consideration debt covenant restrictions, approximately $96.0 million was available for future borrowings under the CAPL Credit Facility. Leverage, as defined in the CAPL Credit Facility, was 4.49 times as of March 31, 2024, compared to 4.21 times as of December 31, 2023. As of March 31, 2024, CrossAmerica was in compliance with its financial covenants under the credit facility.
Distributions
On April 22, 2024, the Board of the Directors of CrossAmerica's General Partner ("Board") declared a quarterly distribution of $0.5250 per limited partner unit attributable to the first quarter 2024. As previously announced, the distribution will be paid on May 10, 2024 to all unitholders of record as of May
3, 2024. The amount and timing of any future distributions is subject to the discretion of the Board as provided in CrossAmerica's Partnership Agreement.
Conference Call
The Partnership will host a conference call on May 9, 2024 at 9:00 a.m. Eastern Time to discuss the first quarter 2024 earnings results. The conference call numbers are 800-717-1738 or 646-307-1865 and the passcode for both is 253945. A live audio webcast of the conference call and the related earnings materials, including reconciliations of any non-GAAP financial measures to GAAP financial measures and any other applicable disclosures, will be available on that same day on the investor section of the CrossAmerica website (www.crossamericapartners.com). After the live conference call, an archive of the webcast will be available on the investor section of the CrossAmerica site at https://caplp.gcs-web.com/webcasts-presentations within 24 hours after the call for a period of sixty days.
Current assets:
Cash and cash equivalents $ 6,278 $ 4,990
Accounts receivable, net of allowances of
Current portion of interest rate swap
Interest rate swap contracts, less current
Current liabilities:
Current portion of debt and finance lease
obligations $ 3,133 $ 3,083
Current portion of operating lease
Accrued expenses and other current
Debt and finance lease obligations, less
current portion 795,755 753,880
Operating lease obligations, less current
Commitments and contingencies (Note 11)
Preferred membership interests 28,401 27,744
Equity:
Common units- 38,027,194 and 37,983,154 units
issued and
outstanding at March 31, 2024 and December
Operating expenses:
Depreciation, amortization and accretion
Loss on dispositions and lease terminations,
Net loss per common unit
Weighted-average common units:
Supplemental information:
(b) excludes depreciation, amortization and
accretion
Cash flows from operating activities:
Net loss $ (17,540 ) $ (979 )
Adjustments to reconcile net loss to net cash
provided by operating activities:
Equity-based employee and director compensation
Changes in operating assets and liabilities, net
Cash flows from investing activities:
Lease termination payments to Applegreen,
Cash flows from financing activities:
Distributions paid on distribution equivalent
Net cash provided by (used in) financing
Net increase (decrease) in cash and cash
Segment Results
Wholesale
The following table highlights the results of operations and certain operating metrics of the Wholesale segment (thousands of dollars, except for the number of
distribution sites and per gallon amounts):
Gross profit:
Motor fuel distribution sites (end of period):
((a))
(a) In addition, CrossAmerica distributed motor fuel to sub-wholesalers who
distributed to additional sites.
(b) The decrease in the independent dealer site count was primarily attributable
to the net loss of contracts, partially offset by divestitures of certain lessee
dealer sites but with continued fuel supply.
(c) The decrease in the lessee dealer count was primarily attributable to the
conversion of certain lessee dealer sites to company operated sites, including
through the Applegreen Acquisition, and CrossAmerica's real estate
rationalization effort.
Retail
The following table highlights the results of operations and certain operating metrics of the Retail segment (in thousands, except for the number of retail sites):
Gross profit:
Retail sites (end of period):
Total retail segment statistics:
Margin per gallon, before deducting credit card
fees and commissions $ 0.308 $ 0.318
Company operated site statistics:
Margin per gallon, before deducting credit card
Same storemerchandise sales excluding
Commission site statistics:
Average retail fuel sites 199 198
Margin per gallon, before deducting credit card
fees and commissions $ 0.267 $ 0.273
(a) The increase in the company operated site count was primarily attributable
to the conversion of certain lessee dealer and commission agent sites to company
operated sites.
(b) The increase in the commission agent site count was primarily attributable
to the conversion of certain lessee dealer sites to commission agent sites,
partially offset by the conversion of certain commission agent sites to company
operated sites.
(c) Same store fuel volume and same store merchandise sales include aggregated
individual store results for all stores that had fuel volume or merchandise
sales in all months for both periods. Same store merchandise sales excludes
branded food sales and other revenues such as lottery commissions and car wash
sales. Certain merchandise products have been transitioned from a gross profit
model (whereby CrossAmerica owns the inventory and records sales and cost of
sales) to a scan-based trading model (whereby a third party owns the inventory
and CrossAmerica records a commission in other revenues). Same store merchandise
sales for the three months ended March 31, 2024 was adjusted to gross it up for
the sales that would have been recorded had CrossAmerica not changed models.
Supplemental Disclosure Regarding Non-GAAP Financial Measures
CrossAmerica uses the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges). Adjusted
EBITDA represents EBITDA as further adjusted to exclude equity-based compensation expense, gains or losses on dispositions and lease terminations, net and certain discrete acquisition related costs, such as legal and other professional fees, separation benefit costs and certain other discrete non-cash items arising from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA less cash interest expense, sustaining capital expenditures and current income tax expense. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by distributions paid.
EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio
are used as supplemental financial measures by management and by external users of our financial statements, such as investors and lenders. EBITDA and Adjusted EBITDA are used to assess CrossAmerica's financial performance without regard to
financing methods, capital structure or income taxes and the ability to incur and service debt and to fund capital expenditures. In addition, Adjusted EBITDA is used to assess the operating performance of the Partnership's business on a consistent basis by excluding the impact of items which do not result directly from the wholesale distribution of motor fuel, the leasing of real property, or the day to day operations of CrossAmerica's retail site activities. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are also used to assess the ability to generate cash sufficient to make distributions to CrossAmerica's unitholders.
CrossAmerica believes the presentation of EBITDA, Adjusted EBITDA, Distributable
Cash Flow and Distribution Coverage Ratio provides useful information to investors in assessing the financial condition and results of operations. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio
should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio
have important limitations as analytical tools because they exclude some but not
all items that affect net income. Additionally, because EBITDA, Adjusted EBITDA,
Distributable Cash Flow and Distribution Coverage Ratio may be defined differently by other companies in the industry, CrossAmerica's definitions may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S. GAAP financial measure, for each of the periods indicated (in thousands, except for per unit amounts):
Equity-based employee and director compensation
expense 205 561
Loss on dispositions and lease terminations, net
(a) During the three months ended March 31, 2024, CrossAmerica recorded a $15.9
million loss on lease terminations with Applegreen, including a $1.4 million
non-cash write-off of deferred rent income.
(b) Relates to certain acquisition-related costs, such as legal and other
professional fees, separation benefit costs and purchase accounting adjustments
associated with recent acquisitions.
(c) Under the Partnership Agreement, sustaining capital expenditures are capital
expenditures made to maintain CrossAmerica's long-term operating income or
operating capacity. Examples of sustaining capital expenditures are those made
to maintain existing contract volumes, including payments to renew existing
distribution contracts, or to maintain the sites in conditions suitable to
lease, such as parking lot or roof replacement/renovation, or to replace
equipment required to operate the existing business.
(d) Excludes income tax incurred on the sale of sites.
About CrossAmerica Partners LP
CrossAmerica Partners LP is a leading wholesale distributor of motor fuels, convenience store operator, and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is
indirectly owned and controlled by entities affiliated with Joseph V. Topper, Jr., the founder of CrossAmerica Partners and a member of the board of the general partner since 2012. Formed in 2012, CrossAmerica Partners LP is a distributor of branded and unbranded petroleum for motor vehicles in the United States and distributes fuel to approximately 1,700 locations and owns or leases approximately 1,100 sites. With a geographic footprint covering 34 states, the Partnership has well-established relationships with several major oil brands, including ExxonMobil, BP, Shell, Marathon, Valero, Phillips 66 and other major brands. CrossAmerica Partners LP ranks as one of ExxonMobil's largest distributors by fuel volume in the United States and in the top 10 for additional brands. For additional information, please visit www.crossamericapartners.com (http://www.crossamericapartners.com).
Contact
Investor Relations: Randy Palmer, rpalmer@caplp.com or 610-625-8000
Cautionary Statement Regarding Forward-Looking Statements
Statements contained in this release that state the Partnership's or management's expectations or predictions of the future are forward-looking statements. The words "believe," "expect," "should," "intends," "estimates," "target" and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see CrossAmerica's Form 10-K or Forms 10-Q filed with the Securities
and Exchange Commission, and available on CrossAmerica's website at www.crossamericapartners.com. The Partnership undertakes no obligation to publicly update or revise any statements in this release, whether as a result of
new information, future events or otherwise.
Â
CrossAmerica Partners LP Reports First Quarter 2024 Results * Reported First Quarter 2024 Net Loss of $17.5 million that includes a $15.9
million loss on lease terminations with Applegreen, Adjusted EBITDA of $23.6
million and Distributable Cash Flow of $11.7 million compared to a Net Loss
of $1.0 million, Adjusted EBITDA of $31.7 million and Distributable Cash
Flow of $19.1 million for the First Quarter 2023
* Reported First Quarter 2024 Gross Profit for the Wholesale Segment of $27.0
million compared to $31.2 million of Gross Profit for the First Quarter
2023 and First Quarter 2024 Gross Profit for the Retail Segment of $54.4
million compared to $50.8 million of Gross Profit for the First Quarter 2023 * Leverage, as defined in the CAPL Credit Facility, was 4.49 times as of March
31, 2024, compared to 4.21 times as of December 31, 2023
* The Distribution Coverage Ratio for the trailing twelve months ended March
31, 2024 was 1.37 times compared to 1.70 times for the comparable period of
2023
* Began conversions of Applegreen lessee dealer locations to company operated
retail locations during First Quarter 2024, with all 59 locations converted
to company operated locations early in the Second Quarter 2024
* The Board of Directors of CrossAmerica's General Partner declared a
quarterly distribution of $0.5250 per limited partner unit attributable to
the First Quarter 2024
Allentown, PA May 8, 2024 - CrossAmerica Partners LP (NYSE: CAPL) ("CrossAmerica" or the "Partnership"), a leading wholesale fuels distributor, convenience store operator, and owner and lessor of real estate used in the retail distribution of motor fuels, today reported financial results for the first quarter ended March 31, 2024.
"The first quarter was a difficult operating environment, with generally increasing fuel prices that resulted in lower margins along with industry wide lower overall demand for both fuel and merchandise. Our financial results for the quarter compared to the prior year reflect these challenges," said Charles Nifong, President and CEO of CrossAmerica. "After the quarter end, we finished our conversion of the Applegreen lessee dealer locations to company operated retail locations, which we expect to be immediately accretive to our financial results. Despite a challenging quarter, our business fundamentals are strong and
we are well positioned with both our operations and capital structure for continued success."
Non-GAAP Measures and Same Store Metrics
Non-GAAP measures used in this release include EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. These Non-GAAP measures
are further described and reconciled to their most directly comparable GAAP measures in the Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release.
Same store fuel volume and same store merchandise sales include aggregated individual store results for all stores that had fuel volume or merchandise sales in all months for both periods within the same segment. Same store merchandise sales excludes branded food sales and other revenues such as lottery
commissions and car wash sales. Certain merchandise products have been transitioned from a gross profit model (whereby CrossAmerica owns the inventory and records sales and cost of sales) to a scan-based trading model (whereby a third party owns the inventory and CrossAmerica records a commission in other revenues). Same store merchandise sales for the three months ended March 31, 2024 was adjusted to gross it up for the sales that would have been recorded
had CrossAmerica not changed models.
First Quarter Results
Consolidated Results
+-------------------------------------------------+----------+---------+
| Key Operating Metrics | Q1 2024 | Q1 2023 |
+-------------------------------------------------+----------+---------+
| Net Income | ($17.5M) | ($1.0M) |
+-------------------------------------------------+----------+---------+
| Operating Expenses | $52.0M | $45.6M |
+-------------------------------------------------+----------+---------+
| Adjusted EBITDA | $23.6M | $31.7M |
+-------------------------------------------------+----------+---------+
| Distributable Cash Flow | $11.7M | $19.1M |
+-------------------------------------------------+----------+---------+
| Distribution Coverage Ratio: Current Quarter | 0.59x | 0.96x |
+-------------------------------------------------+----------+---------+
| Distribution Coverage Ratio: Trailing 12 Months | 1.37x | 1.70x |
+-------------------------------------------------+----------+---------+
CrossAmerica reported declines in Net Income, Adjusted EBITDA and Distributable
Cash Flow for the first quarter 2024 compared to the first quarter 2023. This
was primarily driven by an overall decline in motor fuel gross profit associated
with the movements of crude oil prices within the two periods and an increase in
operating expenses primarily related to the conversion of certain lessee dealer
and commission agent sites to company operated sites. This was partially offset
by an increase in merchandise gross profit of 18% for the first quarter 2024
when compared to the same period in 2023. The year-over-year decline in
Distributable Cash Flow and Distribution Coverage was primarily driven by the
decline in Adjusted EBITDA noted above.
Wholesale Segment
+-------------------------------------------+-----------+-----------+
| Key Operating Metrics | Q1 2024 | Q1 2023 |
+-------------------------------------------+-----------+-----------+
| Wholesale segment gross profit | $27.0M | $31.2M |
+-------------------------------------------+-----------+-----------+
| Wholesale motor fuel gallons distributed | 184.0M | 201.9M |
+-------------------------------------------+-----------+-----------+
| Average wholesale gross profit per gallon | $ 0.079 | $ 0.083 |
+-------------------------------------------+-----------+-----------+
During the first quarter 2024, CrossAmerica's wholesale segment gross profit
decreased 14% compared to the first quarter 2023. This was driven by a decline
in motor fuel and rent gross profit primarily due to the conversion of certain
lessee dealer sites to company operated and commission agent sites and a net
loss of independent dealer contracts. The motor fuel gross profit decline was
driven by a 5% decrease in fuel margin per gallon and a 9% decline in wholesale
volume distributed, with a substantial portion of the wholesale volume decline
attributable to the conversion of wholesale locations to retail locations and
the associated volume for these locations is now reflected in CrossAmerica's
retail segment.
Retail Segment
+----------------------------------------------------------+---------+---------+
|Key Operating Metrics |Q1 2024 |Q1 2023 | +----------------------------------------------------------+---------+---------+
|Retail segment gross profit |$54.4M |$50.8M | +----------------------------------------------------------+---------+---------+
| | | | +----------------------------------------------------------+---------+---------+
|Retail segment motor fuel gallons distributed |121.7M |119.1M | +----------------------------------------------------------+---------+---------+
|Same store motor fuel gallons distributed |108.6M |112.3M | +----------------------------------------------------------+---------+---------+
|Retail segment motor fuel gross profit |$26.0M |$26.8M | +----------------------------------------------------------+---------+---------+
|Retail segment margin per gallon, before deducting credit | | | |card fees and commissions |$ 0.308 |$ 0.318 | +----------------------------------------------------------+---------+---------+
| | | | +----------------------------------------------------------+---------+---------+
|Same store merchandise sales excluding cigarettes* |$42.3M |$41.3M | +----------------------------------------------------------+---------+---------+
|Merchandise gross profit* |$21.4M |$18.1M | +----------------------------------------------------------+---------+---------+
|Merchandise gross profit percentage* | 28.1 %| 27.8 %| +----------------------------------------------------------+---------+---------+
| | | | +----------------------------------------------------------+---------+---------+
|Operating Expenses |$43.1M |$36.1M | +----------------------------------------------------------+---------+---------+
|Retail Sites (end of period) | 546 | 462 | +----------------------------------------------------------+---------+---------+
*Includes only company operated retail sites
For the first quarter 2024, the retail segment generated a 7% increase in gross profit compared to the first quarter 2023. The increase for the first quarter 2024 was primarily due to higher merchandise gross profit, partially offset by a
decline of 3% in motor fuel gross profit.
The retail segment sold 121.7 million of retail fuel gallons during the first quarter 2024, which was an increase of 2% when compared to the first quarter 2023. This volume increase was primarily driven by the conversion of lessee dealer sites to company operated and commission agent sites over the past year and during the quarter, offset by a decline in volume for the base business. Same store retail segment fuel volume for the first quarter 2024 declined 3%
from 112.3 million gallons during the first quarter 2023 to 108.6 million gallons for the same period in 2024.
For the first quarter 2024, CrossAmerica's merchandise gross profit and other revenue increased 21% when compared to the first quarter 2023. The first quarter
increase was primarily driven by an increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites. Same store merchandise sales excluding cigarettes increased 2% for the first quarter 2024 when compared to the first quarter 2023. Merchandise gross profit percentage increased from 27.8% for the first quarter 2023 to 28.1% for the first quarter 2024, primarily due to improved merchandise margins in the categories of packaged beverages and snacks.
For the first quarter 2024, operating expenses for the retail segment increased $7 million dollars or 20% primarily driven by a 22% increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Acquisition of Assets from Applegreen
On January 26, 2024, CrossAmerica entered into an agreement to acquire certain
assets from Applegreen Midwest, LLC and Applegreen Florida, LLC. The assets were
acquired via the termination of the Partnership's existing lease agreements with
the Applegreen entities at 59 locations, for total consideration of $16.9
million. The transaction closed on a rolling basis by site beginning during the
first quarter of 2024 and ending in April 2024. The Partnership also acquired
for cash the inventory at the locations. The terms of the Partnership's leases
with Applegreen Midwest, LLC and Applegreen Florida, LLC could have been
extended to 2049 and 2048, respectively, including all renewal options. Of the
59 locations, 31 locations were converted during the first quarter of 2024 and
the remaining locations converted in April 2024. This transaction resulted in
the conversion of these lessee dealer sites to company operated sites.
Liquidity and Capital Resources
As of March 31, 2024, CrossAmerica had $798.3 million outstanding under its CAPL
Credit Facility. As of May 3, 2024, after taking into consideration debt covenant restrictions, approximately $96.0 million was available for future borrowings under the CAPL Credit Facility. Leverage, as defined in the CAPL Credit Facility, was 4.49 times as of March 31, 2024, compared to 4.21 times as of December 31, 2023. As of March 31, 2024, CrossAmerica was in compliance with its financial covenants under the credit facility.
Distributions
On April 22, 2024, the Board of the Directors of CrossAmerica's General Partner ("Board") declared a quarterly distribution of $0.5250 per limited partner unit attributable to the first quarter 2024. As previously announced, the distribution will be paid on May 10, 2024 to all unitholders of record as of May
3, 2024. The amount and timing of any future distributions is subject to the discretion of the Board as provided in CrossAmerica's Partnership Agreement.
Conference Call
The Partnership will host a conference call on May 9, 2024 at 9:00 a.m. Eastern Time to discuss the first quarter 2024 earnings results. The conference call numbers are 800-717-1738 or 646-307-1865 and the passcode for both is 253945. A live audio webcast of the conference call and the related earnings materials, including reconciliations of any non-GAAP financial measures to GAAP financial measures and any other applicable disclosures, will be available on that same day on the investor section of the CrossAmerica website (www.crossamericapartners.com). After the live conference call, an archive of the webcast will be available on the investor section of the CrossAmerica site at https://caplp.gcs-web.com/webcasts-presentations within 24 hours after the call for a period of sixty days.
CROSSAMERICA PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars, except unit data)
March 31, December 31,
2024 2023
------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 6,278 $ 4,990
Accounts receivable, net of allowances of
$674 and $709, respectively 35,087 31,185 Accounts receivable from related parties 1,021 437 Inventory 58,037 52,344 Assets held for sale 4,641 400
Current portion of interest rate swap
contracts 7,169 9,321
Other current assets 11,068 9,845
------------- --------------
Total current assets 123,301 108,522
Property and equipment, net 692,728 705,217
Right-of-use assets, net 146,170 148,317
Intangible assets, net 90,422 95,261
Goodwill 99,409 99,409
Deferred tax assets 1,425 759
Interest rate swap contracts, less current
portion 4,439 687
Other assets 21,579 23,510
------------- --------------
Total assets $ 1,179,473 $ 1,181,682
------------- --------------
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt and finance lease
obligations $ 3,133 $ 3,083
Current portion of operating lease
obligations 34,973 34,787 Accounts payable 71,490 68,986 Accounts payable to related parties 6,920 10,180
Accrued expenses and other current
liabilities 24,570 23,674
Motor fuel and sales taxes payable 18,767 20,386
------------- --------------
Total current liabilities 159,853 161,096
Debt and finance lease obligations, less
current portion 795,755 753,880
Operating lease obligations, less current
portion 116,351 118,723
Deferred tax liabilities, net 7,652 12,919
Asset retirement obligations 48,329 47,844
Interest rate swap contracts 1,139 3,535
Other long-term liabilities 52,212 52,934
------------- --------------
Total liabilities 1,181,291 1,150,931
Commitments and contingencies (Note 11)
Preferred membership interests 28,401 27,744
Equity:
Common units- 38,027,194 and 37,983,154 units
issued and
outstanding at March 31, 2024 and December
31, 2023, respectively (39,616 ) (2,392 )
Accumulated other comprehensive income 9,397 5,399
------------- --------------
Total (deficit) equity (30,219 ) 3,007
------------- --------------
Total liabilities and equity $ 1,179,473 $ 1,181,682
------------- --------------
CROSSAMERICA PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars, Except Unit and Per Unit Amounts)
Three Months Ended March 31,
-------------------------------
2024 2023
-------------- --------------
Operating revenues ((a)) $ 941,548 $ 1,016,159
Costs of sales ((b)) 860,200 934,100
-------------- --------------
Gross profit 81,348 82,059
Operating expenses:
Operating expenses ((c)) 52,028 45,623 General and administrative expenses 6,838 5,739
Depreciation, amortization and accretion
expense 18,721 19,820
-------------- --------------
Total operating expenses 77,587 71,182
Loss on dispositions and lease terminations,
net (16,806 ) (1,767 )
-------------- --------------
Operating (loss) income (13,045 ) 9,110
Other income, net 249 261
Interest expense (10,541 ) (12,012 )
-------------- --------------
Loss before income taxes (23,337 ) (2,641 )
Income tax benefit (5,797 ) (1,662 )
-------------- --------------
Net loss (17,540 ) (979 )
Accretion of preferred membership interests 657 601
-------------- --------------
Net loss available to limited partners $ (18,197 ) $ (1,580 )
-------------- --------------
Net loss per common unit
Basic $ (0.48 ) $ (0.04 ) Diluted $ (0.48 ) $ (0.04 )
Weighted-average common units:
Basic 37,994,285 37,940,332 Diluted 37,994,285 37,940,332
Supplemental information:
(a) includes excise taxes of: $ 70,713 $ 69,884 (a) includes rent income of: 19,166 21,320
(b) excludes depreciation, amortization and
accretion
(b) includes rent expense of: 5,419 5,554
(c) includes rent expense of: 3,942 3,798
CROSSAMERICA PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
Three Months Ended
March 31,
--------------------------
2024 2023
----------- ------------
Cash flows from operating activities:
Net loss $ (17,540 ) $ (979 )
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, amortization and accretion expense 18,721 19,820 Amortization of deferred financing costs 483 1,848 Credit loss expense - 37 Deferred income tax benefit (5,932 ) (2,056 )
Equity-based employee and director compensation
expense 205 561 Loss on dispositions and lease terminations, net 16,806 1,767
Changes in operating assets and liabilities, net
of acquisitions (6,927 ) (9,460 )
----------- ------------
Net cash provided by operating activities 5,816 11,538
Cash flows from investing activities:
Principal payments received on notes receivable 45 53 Proceeds from sale of assets - 568 Capital expenditures (6,105 ) (6,001 )
Lease termination payments to Applegreen,
including inventory purchases (19,904 ) -
----------- ------------
Net cash used in investing activities (25,964 ) (5,380 )
Cash flows from financing activities:
Borrowings under revolving credit facilities 49,000 187,400 Repayments on revolving credit facilities (6,740 ) (15,537 ) Repayments on the Term Loan Facility - (158,980 ) Payments of finance lease obligations (744 ) (698 ) Payments of deferred financing costs (74 ) (6,906 )
Distributions paid on distribution equivalent
rights (65 ) (56 )
Distributions paid on common units (19,941 ) (19,918 )
----------- ------------
Net cash provided by (used in) financing
activities 21,436 (14,695 )
----------- ------------
Net increase (decrease) in cash and cash
equivalents 1,288 (8,537 )
Cash and cash equivalents at beginning of period 4,990 16,054
----------- ------------
Cash and cash equivalents at end of period $ 6,278 $ 7,517
----------- ------------
Segment Results
Wholesale
The following table highlights the results of operations and certain operating metrics of the Wholesale segment (thousands of dollars, except for the number of
distribution sites and per gallon amounts):
Three Months Ended
March 31,
-------------------------
2024 2023
----------- -----------
Gross profit:
Motor fuel gross profit $ 14,603 $ 16,708
Rent gross profit 11,439 13,255
Other revenues 920 1,247
----------- -----------
Total gross profit 26,962 31,210
Operating expenses (8,897 ) (9,541 )
----------- -----------
Operating income $ 18,065 $ 21,669
----------- -----------
Motor fuel distribution sites (end of period):
((a))
Independent dealers ((b)) 624 643
Lessee dealers ((c)) 511 612
----------- -----------
Total motor fuel distribution sites 1,135 1,255
----------- -----------
Average motor fuel distribution sites 1,172 1,271
Volume of gallons distributed 184,025 201,861
Margin per gallon $ 0.079 $ 0.083
(a) In addition, CrossAmerica distributed motor fuel to sub-wholesalers who
distributed to additional sites.
(b) The decrease in the independent dealer site count was primarily attributable
to the net loss of contracts, partially offset by divestitures of certain lessee
dealer sites but with continued fuel supply.
(c) The decrease in the lessee dealer count was primarily attributable to the
conversion of certain lessee dealer sites to company operated sites, including
through the Applegreen Acquisition, and CrossAmerica's real estate
rationalization effort.
Retail
The following table highlights the results of operations and certain operating metrics of the Retail segment (in thousands, except for the number of retail sites):
Three Months Ended
March 31,
-------------------------
2024 2023
----------- -----------
Gross profit:
Motor fuel $ 26,036 $ 26,760
Merchandise 21,443 18,123
Rent 2,308 2,511
Other revenue 4,599 3,455
----------- -----------
Total gross profit 54,386 50,849
Operating expenses (43,131 ) (36,082 )
----------- -----------
Operating income $ 11,255 $ 14,767
----------- -----------
Retail sites (end of period):
Company operated retail sites ((a)) 343 268
Commission agents ((b)) 203 194
----------- -----------
Total system sites at the end of the period 546 462
----------- -----------
Total retail segment statistics:
Volume of gallons sold 121,717 119,085 Same store total system gallons sold((c)) 108,573 112,259 Average retail fuel sites 514 457
Margin per gallon, before deducting credit card
fees and commissions $ 0.308 $ 0.318
Company operated site statistics:
Average retail fuel sites 315 258 Same store fuel volume((c)) 72,948 74,777
Margin per gallon, before deducting credit card
fees $ 0.327 $ 0.341 Same store merchandise sales((c)) $ 61,522 $ 61,268
Same storemerchandise sales excluding
cigarettes((c)) $ 42,267 $ 41,334 Merchandise gross profit percentage 28.1 % 27.8 %
Commission site statistics:
Average retail fuel sites 199 198
Margin per gallon, before deducting credit card
fees and commissions $ 0.267 $ 0.273
(a) The increase in the company operated site count was primarily attributable
to the conversion of certain lessee dealer and commission agent sites to company
operated sites.
(b) The increase in the commission agent site count was primarily attributable
to the conversion of certain lessee dealer sites to commission agent sites,
partially offset by the conversion of certain commission agent sites to company
operated sites.
(c) Same store fuel volume and same store merchandise sales include aggregated
individual store results for all stores that had fuel volume or merchandise
sales in all months for both periods. Same store merchandise sales excludes
branded food sales and other revenues such as lottery commissions and car wash
sales. Certain merchandise products have been transitioned from a gross profit
model (whereby CrossAmerica owns the inventory and records sales and cost of
sales) to a scan-based trading model (whereby a third party owns the inventory
and CrossAmerica records a commission in other revenues). Same store merchandise
sales for the three months ended March 31, 2024 was adjusted to gross it up for
the sales that would have been recorded had CrossAmerica not changed models.
Supplemental Disclosure Regarding Non-GAAP Financial Measures
CrossAmerica uses the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges). Adjusted
EBITDA represents EBITDA as further adjusted to exclude equity-based compensation expense, gains or losses on dispositions and lease terminations, net and certain discrete acquisition related costs, such as legal and other professional fees, separation benefit costs and certain other discrete non-cash items arising from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA less cash interest expense, sustaining capital expenditures and current income tax expense. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by distributions paid.
EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio
are used as supplemental financial measures by management and by external users of our financial statements, such as investors and lenders. EBITDA and Adjusted EBITDA are used to assess CrossAmerica's financial performance without regard to
financing methods, capital structure or income taxes and the ability to incur and service debt and to fund capital expenditures. In addition, Adjusted EBITDA is used to assess the operating performance of the Partnership's business on a consistent basis by excluding the impact of items which do not result directly from the wholesale distribution of motor fuel, the leasing of real property, or the day to day operations of CrossAmerica's retail site activities. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are also used to assess the ability to generate cash sufficient to make distributions to CrossAmerica's unitholders.
CrossAmerica believes the presentation of EBITDA, Adjusted EBITDA, Distributable
Cash Flow and Distribution Coverage Ratio provides useful information to investors in assessing the financial condition and results of operations. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio
should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio
have important limitations as analytical tools because they exclude some but not
all items that affect net income. Additionally, because EBITDA, Adjusted EBITDA,
Distributable Cash Flow and Distribution Coverage Ratio may be defined differently by other companies in the industry, CrossAmerica's definitions may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S. GAAP financial measure, for each of the periods indicated (in thousands, except for per unit amounts):
Three Months Ended
March 31,
-------------------------
2024 2023
----------- -----------
Net loss $ (17,540 ) $ (979 )
Interest expense 10,541 12,012
Income tax benefit (5,797 ) (1,662 )
Depreciation, amortization and accretion expense 18,721 19,820
----------- -----------
EBITDA 5,925 29,191
Equity-based employee and director compensation
expense 205 561
Loss on dispositions and lease terminations, net
((a)) 16,806 1,767
Acquisition-related costs ((b)) 632 219
----------- -----------
Adjusted EBITDA 23,568 31,738
Cash interest expense (10,058 ) (10,163 )
Sustaining capital expenditures ((c)) (1,642 ) (2,049 )
Current income tax expense ((d)) (137 ) (394 )
----------- -----------
Distributable Cash Flow $ 11,731 $ 19,132
Distributions paid on common units 19,941 19,918
----------- -----------
Distribution Coverage Ratio( (a)) 0.59x 0.96x
----------- -----------
(a) During the three months ended March 31, 2024, CrossAmerica recorded a $15.9
million loss on lease terminations with Applegreen, including a $1.4 million
non-cash write-off of deferred rent income.
(b) Relates to certain acquisition-related costs, such as legal and other
professional fees, separation benefit costs and purchase accounting adjustments
associated with recent acquisitions.
(c) Under the Partnership Agreement, sustaining capital expenditures are capital
expenditures made to maintain CrossAmerica's long-term operating income or
operating capacity. Examples of sustaining capital expenditures are those made
to maintain existing contract volumes, including payments to renew existing
distribution contracts, or to maintain the sites in conditions suitable to
lease, such as parking lot or roof replacement/renovation, or to replace
equipment required to operate the existing business.
(d) Excludes income tax incurred on the sale of sites.
About CrossAmerica Partners LP
CrossAmerica Partners LP is a leading wholesale distributor of motor fuels, convenience store operator, and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is
indirectly owned and controlled by entities affiliated with Joseph V. Topper, Jr., the founder of CrossAmerica Partners and a member of the board of the general partner since 2012. Formed in 2012, CrossAmerica Partners LP is a distributor of branded and unbranded petroleum for motor vehicles in the United States and distributes fuel to approximately 1,700 locations and owns or leases approximately 1,100 sites. With a geographic footprint covering 34 states, the Partnership has well-established relationships with several major oil brands, including ExxonMobil, BP, Shell, Marathon, Valero, Phillips 66 and other major brands. CrossAmerica Partners LP ranks as one of ExxonMobil's largest distributors by fuel volume in the United States and in the top 10 for additional brands. For additional information, please visit www.crossamericapartners.com (http://www.crossamericapartners.com).
Contact
Investor Relations: Randy Palmer, rpalmer@caplp.com or 610-625-8000
Cautionary Statement Regarding Forward-Looking Statements
Statements contained in this release that state the Partnership's or management's expectations or predictions of the future are forward-looking statements. The words "believe," "expect," "should," "intends," "estimates," "target" and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see CrossAmerica's Form 10-K or Forms 10-Q filed with the Securities
and Exchange Commission, and available on CrossAmerica's website at www.crossamericapartners.com. The Partnership undertakes no obligation to publicly update or revise any statements in this release, whether as a result of
new information, future events or otherwise.
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| Name | WKN | Börse | Kurs | Datum/Zeit | Diff. | Diff. % | Geld | Brief | Erster | Schluss | |
|---|---|---|---|---|---|---|---|---|---|---|---|
 |
CrossAmerica Partners LP | A12C9A | NYSE | 19,920 | 17.05.24 03:00:07 | +0,280 | +1,43% | 19,090 | 20,790 | 19,570 | 19,920 |
